Tradesman insurance protects tradesmen against the unexpected losses that can cause them problems. It generally takes the form of a package of different insurance covers.
The core cover is public liability insurance as every tradesman needs this type of insurance. The other types of insurance that can be included in the tradesman insurance package are:
- Employer’s liability insurance
- Property insurance
- Contract works insurance
- Legal expenses insurance
- Personal accident and sickness insurance
Public liability insurance
Public liability insurance covers compensation claims made against you by third parties who believe that you have done something or failed to do something and they have been injured or their property has been damaged as a result.
Although you aren’t legally required to have public liability insurance, it would be foolish to consider operating without it because some compensation claims can cost in excess of £250,000 to settle. Often, it is also a contractual requirement that you have public insurance so if you do not have this cover, you may not be able to work.
Public liability insurance policies contain an indemnity limit. This is the most that the insurer will pay in the event of a claim. The standard limit is usually £1,000,000 although higher limits are available.
Standard public liability insurance policies only cover compensation claims involving injuries or property damage. You should make sure that your public liability insurance includes a financial loss cover extension to protect you in case a compensation claim for a purely economic loss is made against you.
As well as paying any compensation awarded, public liability insurance also covers any associated costs and expenses, including the legal fees incurred as a result of the claim. Your insurer will also help you deal with any claims, so you won’t have to worry about dealing with potentially complex legal arguments.
Employer’s liability insurance
This type of insurance is similar to public liability insurance but it covers compensation claims made against you by your employees rather than third parties.
If you employ anyone, even if they’re only employed on a casual or temporary basis, you’re legally required to have employer’s liability insurance.
Property insurance covers your business property against losses due to accidental damage and theft. However, you should also make sure you have contract works insurance to protect any property that is on site.
Contract works insurance
This is another type of property insurance. It covers your property against losses due to accidental damage and theft when it is on site.
As well as covering your own property, it also covers any property that you have hired in. It also covers the work in progress and any materials that are being used in the project.
Legal expenses insurance
Legal expenses insurance protects you if you find yourself involved in legal action. It pays the legal costs and your legal expenses insurer will help you deal with the legal action.
A wide range of different types of legal action are covered, including:
- Employment tribunals
- Disputes with your neighbours
- Contractual disputes
- Tax/VAT inspections
Personal accident & sickness insurance
If you are unable to work because you are ill or have been injured, you’ll be unable to earn – but your monthly outgoings will still need to be covered. Personal accident and sickness insurance covers your income if you find yourself in this situation.
It pays a weekly benefit while you are off work which means that you can concentrate on your recovery without having to worry about how you’re going to pay the bills.
If you will be unable to return to work on a permanent basis, a lump sum is payable instead. A lump sum is also payable in the event of certain injuries, such as the loss of an eye or a limb.